Hyperliquid Urges EU to Regulate Perpetual Futures as Derivatives

Hyperliquid Policy Center, or HPC, an affiliate of Hyperliquid (HYPE), has urged the European Union to bring perpetual futures into its regulatory framework.

Odaily reported on October 1 that HPC recently submitted a formal response to the European Commission’s targeted consultation on revisions to the Markets in Crypto-Assets regulation, or MiCA. It was the first time HPC had sent a policy submission to a regulator outside the US.

In the filing, HPC argued that the EU should adapt existing financial rules to the characteristics of on-chain markets rather than introduce new regulations. It proposed using existing guidance from the European Securities and Markets Authority, or ESMA, to place perpetual futures contracts under the supervisory framework of the Markets in Financial Instruments Directive II, or MiFID II.

MiCA is the EU’s broad regulatory framework for the crypto industry. By contrast, assets classified as financial instruments, including derivatives, are generally regulated under MiFID II. Hyperliquid’s view is that perpetual futures should also be treated under existing derivatives rules based on their economic characteristics.

HPC also argued that overly restrictive rules could isolate EU investors from global liquidity. It said regulation should be designed around a product’s underlying characteristics and risks so that investor protection and access to global markets can be secured at the same time.